On the go and no time to finish that story right now? Your News is the place for you to save content to read later from any device. Register with us and content you save will appear here so you can access them to read later.

This week, small business editor Caitlin Sykes talks to business owners about equity crowdfunding.

Tim Lightbourne and Rob Cameron are the founders of Invivo Wines. In March last year the company raised $2 million through an equity crowdfunding campaign that netted 439 investors, who took at total 20 percent stake in the firm.

Why did you go the equity crowdfunding route to raise capital for Invivo?

Around the start of 2014 we were growing pretty strongly and we wanted to accelerate that even more. We initially looked at two capital raising options - bank funding and private equity - but then we started hearing more about equity crowdfunding as an option. Over the years we'd built up a bit of a following, and had a fairly big network and database of people buying our product, and I looked at the UK market and how equity crowdfunding had really taken off there. So I began studying some successful equity crowdfunding campaigns in the UK, and then some of the successful ones here when it launched. Ultimately we thought it would be a great opportunity for some of our supporters to come on board at an accessible level of investment.

Also, I'd read how some companies in the UK, for example Scottish craft brewer BrewDog, had gained thousands of shareholders through crowdfunding that had become active ambassadors for their brand. That was particularly interesting for me, and as it happened we ended up with 439 shareholders who are like our salesforce out there saying 'I own a part of this winery Invivo'. That's super powerful for a brand.

You raised $2 million in your campaign. What do you think made it successful?

We started working on it about six months before it went live. We travelled around the country pitching what we were about to do - talking to the wine growing community and their families in Marlborough, pitching to investment banks, and generally telling our story to anyone who would listen. We spent months working on our investment memorandum, and brought in a financial investment specialist and international consultant to help us with aspects of that. There was a lot of detail and work that went into that behind the scenes - and probably a lot more than most people realise.

We also utilised our database of about 4,000 people, building them up with information about what was coming in the campaign and when. Another thing we did was put up 12-metre high billboards promoting our campaign, which got us quite a bit of traction, and did a fairly solid video pitch - again looking at how successful UK companies had done that.

And we also offered rewards. Everyone who invested received some wine at varying levels according to their investment, and those who invested over $10,000 received a few signed bottles from Rob. We thought he could end up signing about 50 bottles, but in the end he had to sign just over 700, but we wanted that personalised approach.

How did you manage doing that alongside business as usual?

It was a very busy time and I think people do underestimate the amount of time involved in crowdfunding, and still keeping your business reaching those sales targets that you're pitching.

Was that the biggest challenge of the process?

That was a challenge, but it was also challenging to put ourselves, our company, all our years of work, and our numbers out there. And when we first put out the amount we were after, we didn't even know if we'd reach our $500,000 minimum target, so there was definitely a lot of stress around hitting our targets. That's where equity crowdfunding, particularly under the Snowball platform is so different from conventional reward or donation based crowdfunding, where you only need to put a smaller amount of information out in the public domain.